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F ederal
Reserve
Bank
OF DALLAS
Dallas, Texas, May 24, 1951
REGISTRATION REQUIREMENTS
UNDER REGULATION X
To All Real Estate Licevise Holders and Others Concerned
in the Eleventh Federal Reserve District:
Regulation X (Real Estate Credit), which was issued pursuant to the
Defense Production Act of 1950, makes it incumbent upon all persons en
gaged in the business of extending real estate credit to file with the near
est Federal Reserve Bank or Branch a registration statement during the
month of June 1951, on a form furnished by the Federal Reserve Bank.
Under the provisions of the regulation, a real estate agent, broker, or
other person is deemed to be engaged in the business of extending real es
tate credit and is subject to the above-mentioned registration requirement
if, either in the current or preceding calendar year, he makes or has made
real estate loans— or as agent of lenders he has received fees from them
for arranging such loans—more than three different times, or has handled
transactions of either type involving an aggregate amount of credit in
excess of $50,000.
For your information we are enclosing the regulation and all amend
ments thereto, together with Registration Statement forms. If, after read
ing the instructions on the reverse side of the registration form, you find
that your real estate activities have been such as to make it necessary
for you to register, one copy of the registration statement form should be
executed and filed with us not later than June 30, 1951.
This bank and its branches at El Paso, Houston and San Antonio will
be glad to furnish any further information which may be desired concern
ing the regulation.
Yours very truly,
R. R. GILBERT
President
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
Federal Reserve Bank
OF DALLAS
Dallas, Texas, March 3, 1951
REAL ESTATE CREDIT— REGULATION X
Amendment Relating to Defense Construction
To all Persons Engaged in the Business of Extending Real Estate
Credit in the Eleventh Federal Reserve District:
There is quoted below a statement issued by the Board of Gover
nors of the Federal Reserve System for release March 3, 1951, relat
ing to an amendment to Regulation X (as amended February 15,
1951).
“ The Board of Governors has amended Regulation X to
permit terms different from those prescribed by the regulation
to apply to specific new construction necessary to the national
defense. The amendment, which becomes effective March 5,
1951, has been concurred in by the Housing and Home Finance
Administrator.
The provisions of the amendment, to be known as section
6(p) of Regulation X, are as follows:
‘ (p) Defense Construction.—Terms different from
those prescribed by this regulation and the supplement
thereto, to be applicable to specific new construction nec
essary to the national defense, may be authorized by the
Board in areas designated by the Housing and Home
Finance Administrator with the concurrence of the Board
and after surveys have been made by the Administrator
with respect to the needs for such necessary construction
within such areas. Such different terms when so author
ized will be applicable only to such new construction as
may be specified by the Administrator within such desig
nated areas, and will be subject to such conditions as may
be prescribed.’
At the same time the Board adopted this amendment to
Regulation X, it concurred in the recommendation of Housing
and Home Finance Administrator Foley that specific areas
adjacent to new defense industry installations at Paducah,
Kentucky, and Savannah River, South Carolina, be desig
nated defense areas. Mr. Foley advised the Board that, because
of the urgent need for housing workers at the Atomic Energy
Commission installations, he had designated these two areas
for special housing consideration with the approval of defense
mobilization authorities. Any further designations, he said,
would be based on criteria now being developed with the Office
of Defense Mobilization and its related agencies.
The modified terms and method of handling applications
for both non-govemment-aided and government insured or
guaranteed loans in the Paducah and Savannah River areas
will be announced by the Board and the Housing and Home
Finance Agency in a few days.”
This bank and its branches at El Paso, Houston and San Antonio
will be glad to furnish any information which may be desired con
cerning the regulation.
Yours very truly,
R. R. GILBERT
President
REAL ESTATE CREDIT
AMENDMENT NO. 1 TO REGULATION X
Issued by the Board of Governors
of the Federal Reserve System
with the concurrence of the
Housing and Home Finance Administrator
Effective March 5, 1951, Section 6 of Regulation X is hereby
amended by adding, at the end thereof after the present subsec
tion (o ), a new subsection (p) reading as follows:
(p) Defense Construction.— Terms different from
those prescribed by this regulation and the supplement
thereto, to be applicable to specific new construction neces
sary to the national defense, may be authorized by the
Board in areas designated by the Housing and Home
Finance Administrator with the concurrence of the Board
and after surveys have been made by the Administrator
wdth respect to the needs for such necessary construction
within such areas. Such different terms when so authorized
will be applicable only to such new construction as may be
specified by the Adm inistrator within such designated
areas and will be subject to such conditions as may be
prescribed.
REAL ESTATE CREDIT
AMENDMENT NO. 2 TO REGULATION X
Issued by the Board of Governors
of the Federal Reserve System
with the concurrence of the
Housing and Home Finance Administrator
Regulation X is hereby amended in the following respects,
effective March 21, 1951:
1. By substituting the following subsection (g ) in Sec
tion 5:
(g)
Contemplated Construction. — Any builder or
other person who had made substantial commitments or
undertakings before (a) January 12, 1951, with a view
to the building of new construction which is a multi
unit residence or a major addition or major improve
ment to a multi-unit residence, or ( b) February 15,
1951, with a view to the building of new construction
which is a nonresidential structure or a major addition
or a major improvement to a nonresidential structure,
and who asserts that his inability to obtain credit to
finance such new construction on the basis contemplated
by him and by a Registrant prior to January 12, 1951, or
February 15,1951, as the case may be, would cause him a
clear and substantial financial hardship, may apply to the
Federal Reserve Bank of the district in which the new
construction is contemplated for an exemption from this
regulation for such new construction, showing all the
facts and submitting all necessary supporting documents
with respect to his commitments or undertakings and
why compliance with the regulation would cause him a
clear and substantial financial hardship. If such Federal
Reserve Bank after consideration of the application and
supporting documents determines that substantial com
mitments or undertakings were made prior to January
12, 1951, or February 15, 1951, as the case may be, and
that a clear and substantial financial hardship would re
sult from the application of this regulation in such case,
it may issue to such builder or such other person a cer
tificate approving such application and thereupon any
extension of credit to such builder or such other person
by the Registrant named in such certificate with respect
to the new construction that may be specified in such
certificate shall be exempt from the prohibitions of sub
sections (a) and (6) of Section 4 of this regulation.
Applications under this subsection must be sent to the
Federal Reserve Bank prior to April 15, 1951.2
2. By deleting “ May 1, 1951,” in subsection (k) of Section
5 and inserting therefor “ a date 32 days after construction is
completed.”
Federal
r e s e r v e
Bank
OF DALLAS
Dallas, Texas, March 20, 1951
REAL ESTATE CREDIT
AMENDMENT TO REGULATION X
To all Persons Engaged in the Business of Extending Real Estate Credit in the
Eleventh Federal Reserve District:
There is quoted below a statement issued today by the Board of
Governors of the Federal Reserve System for release Wednesday,
March 21, 1951, relating to an amendment to Regulation X (as
amended February 15, 1951).
“ An amendment affecting two sections of Regulation X was
announced by the Board of Governors of the Federal Reserve
System with the concurrence of the Housing and Home
Finance Administrator, to become effective March 21, 1951.
“ The new Section 5(g) provides that a limited number of
builders or other persons who had made substantial commit
ments or undertakings with respect to certain contemplated
multi-unit residential and nonresidential construction may
apply, before April 15, 1951, to a Federal Reserve Bank for an
exemption for the construction if they can show that inability
to obtain credit to finance the construction on a basis previ
ously contemplated with a lender would cause a clear and sub
stantial financial hardship.
“ Section 5(&) of the Regulation formerly provided that
credit extended with respect to certain new construction would
be exempt from the Regulation if extended prior to May 1,
1951. The amendment, however, will exempt such credit if
it is extended prior to a date 32 days after the construction is
completed.”
The text of the Amendment is set forth on the reverse side of
this letter. This bank and its branches at El Paso, Houston, and San
Antonio will be glad to furnish any information which may be desired
concerning the Regulation.
Yours very truly,
R. R. GILBERT
President
REAL ESTATE CREDIT
AMENDMENT NO. 3 TO REGULATION X
Issued by the Board of Governors
of the Federal Reserve System
Regulation X is hereby amended in the following respects
effective April 4, 1951:1
1. In subsection (g) of Section 6, change the title to
“ State and Municipal Programs,” and add at the end
thereof the following new sentence: “ Nothing in this regu
lation shall apply to extensions of credit by any state or
political subdivision of a state or agencies of either with
respect to any nonresidential property.”
Federal Reserve Bank
OF D ALLAS
Dallas, Texas, April 3, 1951
REAL ESTATE CREDIT
AMENDMENT TO REGULATION X
To All Persons Engaged in the Business of Extending Real Estate Credit
in the Eleventh Federal Reserve District:
There is quoted below a statement issued by the Board of
Governors of the Federal Reserve System relating to an amend
ment to Regulation X (as amended February 15, 1951).
“ Amendment No. 3 to Regulation X, ‘Real Estate
Credit,’ has been announced by the Board of Governors
of the Federal Reserve System, to become effective April
4, 1951.
“ The Amendment is for the purpose of exempting
state and local governments from the terms of Regula
tion X where an extension of credit is contemplated on a
basis which does not conform to the Regulation in con
nection with the construction of nonresidential facilities.
According to the Board’s information, such credit exten
sions are uncommon, and the Amendment was adopted
to eliminate the possibility that the Regulation might
impede the construction of needed nonresidential facili
ties.”
The text of the Amendment is set forth on the reverse side
of this letter. This bank and its branches at El Paso, Houston,
and San Antonio will be glad to furnish any information which
may be desired concerning the Regulation.
Yours very truly,
R. R. GILBERT
President
REAL ESTATE CREDIT
AMENDMENT NO. 4 TO REGULATION X
Issued by the Board of Governors
of the Federal Reserve System
with the concurrence of the
Housing and Home Finance Administrator
Regulation X is hereby amended in the following respects,
effective April 16, 1951:
In subsection (e) of Section 5, strike out the period at
the end of the section and add the following:
“ or solely to finance the purchase or construction of a
residence, multi-unit residence, or nonresidential structure
to be used in substitution for a similar structure of which
the borrower has been deprived through or by reason of
eminent domain or condemnation proceedings.”
REAL ESTATE CREDIT
AMENDMENT NO. 5 TO REGULATION X
Issued by the Board of Governors
of the Federal Reserve System
with the concurrence of the
Housing and Home Finance Administrator
Regulation X is hereby amended in the following respects,
effective May 11, 1951:
In subsection (6) of Section 3, add reference lla after
the word “ announcement’’ in the fifth line, and add this
footnote at the bottom of the page:
lla/ Pursuant to public announcement made by the Board on May 11,1951,
all persons so engaged in the business described above on May 31, 1951, must
register with the nearest Federal Reserve Bank or Branch not later than
June 30, 1951, on Form F. R. 269, which may be obtained at any such bank
or branch. All persons who thereafter become so engaged in business must
register within 30 days.
BOARD OF GOVERNORS
of the
FEDERAL RESERVE SYSTEM
REAL E STATE CR ED IT
REGULATION X
As amended effective February 15,1951
INQUIRIES REGARDING THIS REGULATION
Any inquiry relating to this regulation should be addressed
to the Federal Reserve Bank or Federal
Reserve branch bank of the district
in which the inquiry arises.
FOREWORD
This regulation applies to real estate construction credit with respect
to property on which a new residence, multi-unit residence, or nonresidential structure, or a major addition or major improvement tc
an existing residence, multi-unit residence, or nonresidential structure
is begun after 12 o ’clock meridian, August 3, 1950. The regulation
applies, in general, to banks, savings and loan associations, insurance
companies, mortgage companies, loan companies, finance companies,
real estate companies, or other institutions or individuals who are
engaged in* the business of extending real estate credit with respect to
residences, residential property, multi-unit residential property, or
nonresidential property. In order to determine wlvether a particular
institution or individual or a particular transaction is subject to this
regulation, reference should be made to the provisions of the regu
lation itself.
CONTENTS
Page
Sec . 1. Scope and A pplication of R eg u lation ........................................................
S ec . 2. D efinition s ..................................................................................................................
(a)
(b)
(c)
(d)
(e)
(/)
(g)
(h)
(i)
(j)
(k)
(/)
(ni)
(n)
(o)
(p)
(q)
(r)
(s)
Sec. 3. G eneral
(a)
(b)
(c)
“ Person”
“ Registrant”
“ Credit”
“ Extending credit,” “extension of credit” and “extends credit”
“ Real estate construction credit”
“ New construction”
“ Major addition” or “ major improvement”
“ Real property”
“ Maximum loan value”
“ Bona fide sale price”
“ Residence”
“ Multi-unit residence”
“ Family unit”
“ Residential property”
“ Farm property”
“ Multi-unit residential property”
“ Nonresidential property”
“ Nonresidential structure”
“ Public utility”
R equirements
Sec .
R egistration ..................................................
7
of
C red it ..............................................................................................
8
Amount; Maturity; Amortization
Secondary Borrowing
Ascertaining Nature of Credit
Statement of the Borrower
S ec . 5. E xemptions
(a)
(b)
(c)
(id)
(e)
(/)
(g)
(h)
(i)
(j )
(k)
(l)
and
General Requirements
Registration
Suspension of Registration
Sec . 4. E xtension
(a)
(b)
(c)
(d)
1
1
and
E xceptions ...............................................................................
11
Minimum Amount
Short-Term Residential Construction Credits
Other Short-Term Construction Credits
Medical Expenses, etc.
Casualties
Contracts to Sell
Contemplated Construction
Labor and Material
Credits Secured by Life Insurance Policies
Farm Property
Exemption for Certain New Construction
Materials, Articles and Services Used in New Construction
6. M iscellaneous Provisions ................................................................................... 15
(a) Evasions
(b) Outstanding Contracts and Obligations
(c) Real Property Outside the United States
(d) Preservation of Records; Inspections; Administrative Reports
(e) Default and Foreclosure; Serviceman’s Preinduction Debt
(/) Veterans Programs under State Law
(g) State Housing Programs
(h) Extension of Credit for Mixed Purposes
(i) Calculation of Maximum Maturity
(j) Three- and Four-Unit Residences
(k) Right of Registrant to Impose Stricter Requirements
(l) Reliance upon Statement of the Borrower
(m) False Statements
(n) Statutory Penalties
(o) Enforceability of Contracts
Supplem ent ............................................................................ ...................................................... 20
Schedule. I. One- to Four-Unit Residential Property and Farm
Residences
Schedule II. Multi-unit Residential Property
Schedule III. Nonresidential Property
REGULATION X
As amended effective February 15, 1951
REAL ESTATE CREDIT
S E C T IO N
1. SCO PE A N D A P P L IC A T IO N O F R E G U L A T IO N
This regulation is issued by the Board of Governors of the Federal
Reserve System (hereinafter called the. “ Board” ), with the concur
rence of the Housing and Home Finance Administrator with respect
to provisions relating to real estate construction credit involving.resi
dential property and multi-unit residential property, under authority
of the “ Defense Production Act of 1950,” approved September 8, 1950
(hereinafter called the “ A ct” ), and Executive Order No. 10161, dated
September 9, 1950.
This regulation applies to any person who is engaged in the business
of extending real estate credit with respect to residences, residential
property, multi-unit residential property, or nonresidential property,
including any person who acts as agent in arranging for such credit.
For the purposes of this regulation, a person shall be deemed to be
engaged in the business of extending such real estate credit if, in his
own right or as agent or fiduciary, he either (1) extends or has ex
tended such real estate credit more than three different times during
the current calendar year or during the preceding calendar year, or
(2) extends or has extended such real estate credit in an amount
or amounts aggregating more than $50,000 during the current calendar
year or during the preceding calendar year. For the purposes of this
section, such real estate credit shall be deemed to include credit with
respect to any residence, residential property, multi-unit residential
property, or nonresidential property, whether or not there is any new
construction thereon, and whether or not such credit is extended,
insured, or guaranteed by the Federal Housing Administration, the
Veterans’ Administration, or any other department, independent estab
lishment or agency of the United "States, and whether or not such
credit is exempt from this regulation.
S E C T IO N
2 . D E F IN IT IO N S
For the purposes of this regulation, unless the context otherwise
requires:
(a )
“ P erson ”
has the meaning given it in section 702(a) of the
Act.1
1 Section 702(a) of the Act provides: “The word ‘person’ includes an individual,
corporation, partnership, association, or any other organized group of persons, or
1
2
REGULATION X
S ec . 2
( b ) “ R e g i s t r a n t ” means a person who is registered pursuant to
section 3 of this regulation.
(c) “ C r e d i t ” has the meaning given it in section 602(d) (2) of the
Act,*2
( d ) “ E x t e n d i n g c r e d i t ” “ e x t e n s i o n o f c r e d i t ” and “ e x t e n d s c r e d i t ”
shall include extending or maintaining any credit, or renewing, revising,
consolidating, refinancing, purchasing, selling, discounting, or lending
or borrowing on, any obligation arising out of any credit, or arranging
as agent for any of the foregoing, and also shall include a sale of,
or other transfer of title to, real property if the vendee or transferee
assumes, or takes such property subject to, indebtedness secured by a
mortgage or other lien upon such property.
(e) “ R e a l e s t a t e c o n s t r u c t i o n c r e d i t ” means any credit3 which
(1)
(2)
(3)
(4)
is wholly or partly secured by, or
is for the purpose of purchasing or carrying, or
is for the purpose of financing, or
involves a right to acquire or use,
new construction on real property or real property on which there is
new construction, if such new construction is a residence, multi-unit
residence, or nonresidential structure, or a major addition or major
improvement to a residence, multi-unit residence, or nonresidential
structure, whether such credit is extended before or after such new
construction is begun; but the term “ real estate construction credit”
legal successor or representative of the foregoing, and includes the United States
or any agency thereof, or any other government, or any of its political subdivi
sions. or any agency of any of the foregoing: Provided, That no punishment
provided by this Act shall apply to the United States, or to any such government,
political subdivision, or government agency.”
2Section 602(d)(2) of the Act provides: “ ‘Credit’ means any loan, mortgage,
deed of trust, advance, or discount; any conditional sale contract; any contract
to sell or sale or contract of sale, of property or services, either for present or
future delivery, under which part or all of the price is payable subsequent to the
making of such sale or contract; any rental-purchase contract, or any contract for
the bailment, leasing, or other use of property under which the bailee, lessee, or
user has the option of becoming the owner thereof, obligates himself to pay as
compensation a sum substantially equivalent to or in excess of the value thereof,
or has the right to have all or part of the payments required by such contract
applied to the purchase price of such property or similar property; any option,
demand, lien, pledge, or similar claim against, or for the delivery of property or
money; any purchase, discount, or other acquisition of, or any credit under the
security of, any obligation or claim arising out of any of the foregoing; and any
transaction or series of transactions having a similar purpose or effect.”
3Extended on or after October 12, 1950, with respect to farm residences, resi
dential property, and major additions and major improvements to residences;
or on or after January 12, 1951, with respect to multi-unit residential property
and major additions and major improvemen;.s to multi-unit residences; or on
or after February 15, 1951, with respect to nonresidential property and major
additions and major improvements to nonresidential structures.
Sec . 2
REGULATION X
3
shall not include any loan or loans made, insured, or guaranteed, in
whole or in part, by the Federal Housing Administration, the Vet
erans’ Administration, or any other department, independent estab
lishment or agency in the executive branch of the United States,
or by any wholly owned Government corporation, or by any mixedownership Government corporation as defined in the Government
Corporation Control Act, as amended (including any loan evidenced
by obligations of any local public agency or public housing agency
which national banks may purchase pursuant to the provisions of
section 602(a) of the Housing Act of 1949).
(/) “ N e w c o n s t r u c t i o n ” means any structure, or any major addi
tion or major improvement to a structure, which is or has been begun
after 12 o ’clock meridian, August 3, 1950. Construction will be deemed
to have been “ begun” when any essential materials which are to be
an integral part of the structure have been affixed to or incorporated
on the site in a permanent form.
( g ) “ M a j o r a d d i t i o n ” or “ m a j o r i m p r o v e m e n t ” means any enlarge
ment, reconstruction, alteration, or repair of an existing structure,4 or
any other addition or improvement which becomes or is to become
physically attached to and a part of the structure,4 if the cost or esti
mated cost of such addition or improvement exceeds $2,500, and also
exceeds (1) if the structure is a residence or multi-unit residence, an
amount determined by multiplying $1,500 by the number of family
units in such residence or multi-unit residence prior to such addition
or improvement, or (2) if the structure is a nonresidential structure,
an amount equal to 15 per cent of the appraised value of the nonresi
dential structure 5 as determined in good faith by the Registrant who
extends the credit.6
4 Notwithstanding this definition or any other provision of this regulation,
an addition or improvement to any existing structure which will become a “resi
dence,” “ multi-unit residence,” or “nonresidential structure” by reason of such
addition or improvement shall be treated as an addition or improvement to an
existing “residence,” “multi-unit residence,” or “nonresidential structure,” respec
tively; and, in determining whether the cost or estimated cost of an addition
or improvement to an existing structure which will become a “residence” or
“ multi-unit residence” is such that it would be a major addition or major improve
ment within the meaning of section 2(g), and in determining what the maximum
loan value is. the determination shall be according to the number of family units
which will be in the structure after the addition or improvement has been
completed.
3For this purpose, the value of the land upon which the nonresidential structure
is located is not taken into consideration; and the appraised value is the appraised
value of the structure before the major addition or major improvement is made.
0 It should be noted that section 2 (/) defines “new construction” as including
“any major addition or major improvement” and that section 2(e) defines “real
estate construction credit” as including certain credit with respect to “ real prop
erty on which there is new construction.” Accordingly, if a major addition or
4
REGULATION X
S ec . 2
( h ) “ R e a l p r o p e r t y ” includes leaseholds and other interest in such
property.
( i ) The “ m a x im u m lo a n v a l u e ” of any property 7 shall be the amount
which is computed in the manner prescribed in the Supplement to this
regulation. In making such computations:
(1) For a major addition or major improvement to a residence,
multi-unit residence, or nonresidential structure, “ value” shall be
the cost or estimated co st8 of such major addition or major improve
ment;
(2) For residential property, other than major additions or major
improvements:
(A) In the case of an extension of credit in connection with a
b o n a fi d e sale of residential property, “ value” shall be the b o n a f i d e
sale price;
(B) In the case of any other extension of credit with respect to
residential property:
(i) If the entire cost of the property to the borrower has been
incurred by him not more than 12 months prior to the extension
of credit or is to be incurred by him after such extension of
credit, “ value” shall be the b o n a fi d e cost of the property to the
borrower, including a b o n a fi d e estimate of the cost of completing
new construction on such property when the extension of credit
is for the purpose of financing such new construction;
(ii) If any part of the cost of the property to the borrower
has been incurred by him more than 12 months prior to the
extension of credit, or if any part of such property has been
acquired by gift, exchange, or inheritance, “ value” shall be the
appraised value as determined in good faith by the Registrant
who extends the credit;
major improvement is made to an existing structure, even though such structure
was erected or begun prior to August 3, 1950, any subsequent extension of credit
with respect to such structure or the property on which it is located is “real
estate construction credit.” However, in determining whether property has
become “real property on which there is new construction” by reason of a
major addition or major improvement having been made to an existing structure,
there shall be considered only such costs as are or have been incurred during
any period of 12 consecutive months (or during a period not exceeding 12
months beginning January 12, 1951, if the structure is a residence or multi-unit
residence, or beginning February 15, 1951, if the structure is a nonresidential
structure).
7As used here, “property” means residential property, multi-unit residential
property, nonresidential property, a residence on farm property, or a major addi
tion or major improvement to a residence, a multi-unit residence, or nonresidential
structure, as the case may be.
8Based on such evidence and supporting data as normally would be required
by a prudent lender.
Sec . 2
REGULATION X
5
(3) For an extension of credit which is for the purpose of financ
ing the construction of a residence on farm property, “ value” shall
be the total of (A) the cost or estimated cost of such new construc
tion, and (B) 5 per cent of such cost or estimated cost.8
9
(4) For multi-unit residential property and nonresidential prop
erty, other than major additions or major improvements:
(A) In the case of an extension of credit in connection with a
b o n a fi d e sale of multi-unit residential property or nonresidential
property, “ value” shall be the b o n a f i d e sale price;
(B) In the case of any other extension of credit with respect to
multi-unit residential property or nonresidential property, “ value”
shall be the appraised value as determined in good faith by the
Registrant who extends the credit. Appraisals pursuant to this
provision and other provisions of this regulation will be subject
to inspection by the Board and the Federal Reserve Banks in.
accordance with section 6(d) of this regulation, and appraisals
found to be in excess of those dictated by sound and established
practice in the community shall be deemed sufficient ground for
the suspension of the Registrant pursuant to section 3 (c) of this
regulation.
(;) “ B o n a fi d e s a le p r i c e ” means the amount paid or to be paid by
the vendee in money or its equivalent. It includes, in addition to cash,
(1) the value of any property accepted in part payment, (2) the
unpaid principal amount of any indebtedness incurred or assumed
by the vendee or to which the property remains subject, (3) the
amount of any liens for taxes or special assessments which are in
default or currently due and payable, (4) the amount of any me
chanics’ liens or other liens which the vendee is required to discharge,
(5) the amount which the vendee agrees to pay for any alteration or
other modification made or to be made to the property as an incident
to the sale thereof, and (6) any amounts paid by the vendee for closing
costs. It does not Include any prepaid charges, or any accrued rents
which will be paid to the vendee.
( k ) “ R e s i d e n c e ” 10 means any structure which is used or designed
for permanent or transient dwelling purposes, and which include at
8The 5 per cent is added when the extension of credit is for the purpose of
financing the construction of a residence on farm property in order to take
account of the value of the land upon which the residence is to be constructed.
10 Structures such as hotels, motels, rooming houses, club houses, fraternity or
sorority houses, rest homes, and the like, in which more than one-half of the
floor space consists of units which do not contain kitchen facilities or space
designed for kitchen facilities shall not be deemed to be residences or multi
unit residences. See section 2(r).
6
REGULATION X
S ec . 2
least one but not more than four family units, if the floor space con
tained in such family units comprises at least one-half of the floor
space of such structure. Houses connected by common walls and
commonly known as "row houses” or "semidetached houses” shall be
considered separate structures.
( l ) “ M u l t i - u n i t r e s i d e n c e ” 10 means any structure such as an apart
ment house or apartment hotel (whether owned cooperatively or other
wise) which is used or designed for permanent or transient dwelling
purposes, and which includes more than four family units, if the floor
space contained in such family units comprises at least one-half of
the floor space of such structure.
( m ) “ F a m i l y u n i t ” means space which is used or designed for dwell
ing purposes and which contains one or more rooms with kitchen
facilities (or space designed for kitchen facilities) in or appurtenant
to such rooms.
(ft) “ R e s i d e n t i a l p r o p e r t y ” means any real property, other than
farm property, on which there is or is to be a residence or residences.
(o) “ F a r m p r o p e r t y ” means any real property, other than multi-unit
residential property or nonresidential property, located outside of
urban areas, which is principally used for the production of crops,
livestock or other agricultural commodities.
{ p ) “ M u l t i - u n i t r e s i d e n t i a l p r o p e r t y ” means any real property on
which there is or is to be a multi-unit residence or multi-unit resi
dences.
{ q ) “ N o n r e s i d e n t i a l p r o p e r t y ” means any real property on which
there is or is to be a nonresidential structure or structures.
(r) “ N o n r e s i d e n t i a l s t r u c t u r e ” 11 means any structure other than
(1) a residence,
(2) a multi-unit residence,
(3) a school, hospital, or church,
(4) a structure exclusively used or designed for use
(i) by a public utility,
(ii) by any Government or political subdivision, or
(5) a structure more than 80 per cent of the floor space of which
is used or designed for use
(i) in processing materials, goods, or articles into finished or
partly finished manufactured products,
(ii) in mining or otherwise extracting raw materials, or
10For footnote, see preceding page.
u Nonresidential structures ordinarily subject to this regulation include, among
others, the following: Office buildings, warehouses, stores (including sales display
and service facilities, whether wholesale or retail), banks, hotels, motels, motor
courts, garages, automobile service stations, restaurants, and clubs.
REGULATION X
S ec s . 2, 3
7
(iii)
on farm property in the production, shelter, or storage
incidental thereto, of crops, livestock or other agricultural com
modities.
(s) “ P u b l i c u t i l i t y ” means any transportation company, electric
light or power company, gas company, water company, pipe line com
pany, telephone company, telegraph company, or other similar business
which is operated for the convenience, service or accommodation of
the public if (1) the operations of such company are supervised by a
Federal or State agency, or (2) the members of the public as such
are entitled as of right to demand and use its facilities or services.
SECTION
3.
GENERAL REQUIR EM ENTS AND REGISTRATION
(а) General Requirements.— No person engaged in the business
of extending real estate credit with respect to residences, residential
property, multi-unit residential property or nonresidential property
shall extend real estate construction credit unless (1) he is registered
pursuant to this section, and (2) he has no knowledge of, and has no
reason to know, any fact by reason of which such credit fails to com
ply with any applicable provision of this regulation.
(б) Registration.— Every person engaged in the business of extend
ing real estate credit with respect to residences,' residential property,
multi-unit residential property or nonresidential property shall be
deemed to be registered pursuant to this regulation until such time
as the Board, by public announcement, may require registration state
ments to be filed by all, or any specified classes of, such persons.
Should the Board require such registration statements, a person shall
continue to be registered after the time such statements are required
only if he shall have complied with the requirements of the Board’s
announcement. Every person who is registered in accordance with
the provisions of this subsection is referred to in this regulation as a
“ Registrant.”
(c) Suspension of Registration.— Any Registrant may, after rea
sonable notice and opportunity for a hearing, be suspended by the
Board, as to all or as to particular activities or particular offices and
for specified or indefinite periods, because of any willful or negligent
failure to comply with any provision of this regulation.
A suspension for a specified period will terminate upon the expira
tion of such period. A suspension for an indefinite period may be
terminated by the Board, in its discretion, if the Board is satisfied
that its action would not lead to further violations of this regulation
8
REGULATION X
S ecs . 3 ,4
by the suspended Registrant and would not be otherwise incompatible
with the public interest.
S E C T IO N
4. E X T E N S IO N
OF C R E D IT
(a) Am ount; Maturity; Amortization.— Except as otherwise per
mitted by this regulation, no Registrant shall, either in connection
with a sale or otherwise:
(1) Extend real estate construction credit with respect to resi
dential property, multi-unit residential property, or nonresidential
property (other than major additions or major improvements) if the
amount of credit outstanding with respect to the property (includ
ing any credit exempt from, or not subject to the prohibitions of,
this regulation) exceeds, or as a result of such extension of credit
would exceed, the applicable maximum loan value of such property;
(2) Extend real estate construction credit for the purpose of
financing a major addition or major improvement to a residence,
multi-unit residence or nonresidential structure if the amount of
credit outstanding for the purpose of financing the major addition
or major improvement (including any credit exempt from, or not
subject to the prohibitions of, this regulation) exceeds, or as a result
of such extension of credit would exceed, the applicable maximum
loan value of such major addition or major improvement;
(3) Extend real estate construction credit for the purpose of
financing the construction of a residence on farm property if the
amount of credit outstanding for the purpose of financing the con
struction of the residence (including any credit exempt from, or
not subject to the prohibitions of, this regulation) exceeds, or as a
result of such extension of credit would exceed, the applicable maxi
mum loan value of such residence;
(4) Extend real estate construction credit if such credit would
have a maturity which exceeds the applicable maximum maturity
provisions, or would be repaid in any manner which does not con
form with the applicable amortization provisions, set forth in the
Supplement to this regulation;
(5) Purchase, discount or lend on any credit instrument evidenc
ing real estate construction credit which is subject to and not
exempt from this regulation, unless the. terms oi such credit con
formed with the provisions of the Supplement to this regulation
when such credit was originally extended or conform with the pro
visions of the Supplement at the time of such purchase, discount
or loan; but for the purposes of this paragraph credit shall be con
S ec . 4
REGULATION X
9
sidered to be subject to the regulation even though extended by a
person other than a Registrant;
(6)
If the Registrant is acting as principal— sell, or transfer title
to, residential property, multi-unit residential property or nonresidential property on which there is new construction (which is
a residence, multi-unit residence or nonresidential structure, or a
major addition or major improvement to a residence, multi-unit
residence or nonresidential structure) and with respect to which the
vendee or transferee assumes, or takes such property subject to,
indebtedness secured by a mortgage or other lien upon such property,
if the amount of outstanding credit (including any credit exempt
from, or not subject to the prohibitions of, this regulation) which
was extended after October 12, 1950, .(or after January 12, 1951, if
it is a sale or transfer of multi-unit residential property or after
February 15, 1951, if it is a sale or transfer of nonresidential
property) with respect to the property exceeds, or as a result of such
sale or transfer would exceed, the applicable maximum loan value
of such property, or if any outstanding real estate construction
credit (subject to and not exempt from this regulation) with respect
to such property does not conform with the provisions of this regu
lation and the Supplement thereto.12
( b ) Secondary Borrowing.— Except as otherwise permitted by this
regulation, no Registrant shall extend real estate construction credit
if he knows or has reason to know that there is, or that there is to be,
any other credit extended with respect to the property 13 (1) which,
when added to the credit proposed to be extended by the Registrant,
would cause the total amount of credit outstanding with respect to
the property 13 (including any credit exempt from, or not subject to
the prohibitions of, this regulation) to exceed the applicable maxi
mum loan value of such property, or (2) which, if it is real estate
construction credit subject to and not exempt from this regulation,
does not or would not comply with the applicable maximum maturity
and amortization provisions set forth in the Supplement to this regu
lation.
(c) Ascertaining Nature of Credit.— No Registrant shall extend
any credit unless he is satisfied, and maintains records which reason
ably demonstrate on their face, whether such credit is or is not real
12For application to three- and four-unit residences, see section 6(;').
“ As used here, “property” means residential property, multi-unit residential
property, nonresidential property, a residence on farm property, or a major addi
tion or major improvement to a residence, a multi-unit residence or nonresiden
tial structure, as the case may be.
10
REGULATION X
Sec . 4
estate construction credit; provided, however, unless the Registrant
has actual knowledge that the credit is real estate construction credit,
the requirements of this sentence shall not apply (1) to any exten
sion of credit which is made by a bank, savings and loan association,
or similar institution and which is to be repaid within six months and
is fully secured by withdrawable shares issued by or savings accounts
held with the lender, or (2) to any extension of credit in the ordinaiy
course of business for a commercial, agricultural, or business purpose
where the Registrant, because of a previous course of dealings or
correspondence between himself and the borrower, has no reason to
believe that the credit is or will be real estate construction credit.
The preceding sentence does not require that a Registrant obtain a
signed statement from each borrower, and if the Registrant is satis
fied that credit is not real estate construction credit, other kinds of
records may be used to demonstrate this fact. Such records may
include, among others, (1) any correspondence, memoranda, loan
applications or other documents of any kind, whether or not originat
ing in connection with the credit in question, which on the basis of
a reasonable interpretation show that the credit is not real estate
construction credit; or (2) a written endorsement or rubber stamp
legend, placed upon the credit instrument or upon other papers in
connection with the credit and signed by the Registrant or a respon
sible officer of the Registrant, stating that he is satisfied that the credit
in question is not real estate construction credit. If, however, a Regis
trant desires to obtain, and accepts in good faith, a signed Statement
of the Borrower stating that the credit is not wholly or partly secured
by, or for the purpose of purchasing or carrying, or for the purpose
of financing, or one which involves the right to acquire or use, new
construction on real property or real property on which there is new
construction (or that such new construction, if any, is not a resi
dence, multi-unit residence or nonresidential structure, or a major
addition or major improvement to a residence, multi-unit residence
or nonresidential structure), such Statement shall be deemed to be
compliance with the requirements of this subsection.
( d ) Statement of the Borrower.— No Registrant shall extend real
estate construction credit unless he has accepted in good faith a
signed Statement of the Borrower (1) stating whether the credit is
with respect to property 14 subject to the regulation, and (2) stating,
14As used here, “property” means residential property, multi-unit residential
property, nonresidential property, a residence on farm property, or a major addi
tion or major improvement to a residence, multi-unit residence, or nonresidential
structure, as the case may be.
REGULATION X
S ec s . 4, 5
11
if the Registrant claims that such credit is exempt from this regula
tion, the reason for such exemption; and, if the credit is not exempt,
(3) stating the amount of credit previously extended and outstand
ing, and the amount of any other credit to be extended, with respect
to the property,14 (4) stating, if the Registrant in computing “ value”
relies upon cost or estimated cost to the borrower (where such cost
or estimated cost may be used for this purpose), the b o n a fid e amount
of such cost or estimated cost to the borrower, and (5) stating, if
the extension of credit is in connection with a sale, the sale price,
that the sale price was b o n a fi d e , and the value and a brief descrip
tion of any property accepted in part payment. If the extension of
credit is in connnection with a sale, such Statement shall state that
the vendor of the property has or will have no financial interest in
such property or in the proceeds of any subsequent disposition thereof,
except such interest as may be fully disclosed to the Registrant. The
amount of any such financial interest of the vendor retained in the
property or any proceeds of the disposition thereof shall be deemed
to be real estate construction credit extended with respect to such
property. The Statement of the Borrower may be made, if desired,
on a form a sample of which is obtainable at any Federal Reserve
Bank or branch.
SECTIO N
S. E X E M P T IO N S
AND E X C E P T IO N S
(a) Minimum Amount.— The prohibitions of subsections (a) and
(6) of section 4 of this regulation shall not apply to any extension of
credit if the total amount thereof, including all outstanding credit
which was granted after October 12, 1950, with respect to the same
property,15 is not in excess of $2,500.
( b ) Short-Term Residential Construction Credits.— The prohibi
tions of subsections (a) and (6) of section 4 of this regulation shall
not apply to any credit which is for the purpose of financing the con
struction of a residence or residences or a major addition or major
improvement to a residence, if the maturity of such credit is not
more than 18 months; provided, that this exemption shall not be
construed to permit any renewal, revision, consolidation, or refinancing
of such credit except on terms which conform with the provisions of
this regulation and the Supplement thereto. If (1) the initial purpose
of an extension of credit having a maturity exceeding 18 months is
14For footnote, see preceding page.
15As used here, “property” means residential property, multi-unit residential
property, nonresidential property, a residence on farm property, or a major addi
tion or major improvement to a residence, multi-unit residence, or nonresidential
structure, as the case may be.
12
REGULATION X
S ec . 5
the financing of the construction of a residence or residences or a major
addition or major improvement to a residence and (2) the credit instru
ment provides, or an agreement with respect to the credit requires,
that within 32 days after completion of such construction or upon a
specified date when the Registrant estimates in good faith the construc
tion will be completed, which in either case shall be not more than
18 months after the extension of the credit, the terms of the credit
shall conform thereafter with the applicable maximum loan value and
the applicable maturity and amortization provisions set forth in
Schedule I of the Supplement to this regulation, then in such event
the prohibitions of subsections (a) and (6) of section 4 of this regu
lation shall not apply to such credit until after the lapse of the time
so described or specified, but if at any time after the date of the
extension of such credit, a Registrant sells or transfers title to the
property with respect to which the credit is extended, such sale or
transfer of title must conform to the provisions of this regulation and
Schedule I of the Supplement thereto.16
(c) Other Short-Term Construction Credits.— The prohibitions of
subsections (a) and ( b ) of section 4 of this regulation shall not apply
to any credit which is for the purpose of financing the construction
of a multi-unit residence or nonresidential structure or a major addi
tion or major improvement to a multi-unit residence or nonresidential
structure and which is extended to any person other than the owner
of the property and has a maturity of not more than 24 months; pro
vided, that this exemption shall not be construed to permit any re
newal, revision, consolidation, or refinancing of such credit except on
terms which conform with the provisions of this regulation and the
Supplement thereto. Extensions of credit for the purpose of financ
ing the construction of a multi-unit residence or nonresidential struc
ture or a major addition or major improvement to a multi-unit
residence or nonresidential structure may not be made to the
owner of the property in a total amount exceeding the maximum
loan value of the property; but any such credit extended to the owner
of the property shall be exempt from the amortization provision in
Schedule III of the Supplement to this regulation if (1) such credit
has a maturity of not more than 24 months, or (2) the initial purpose
of credit having a maturity exceeding 24 months is the financing of
the construction of a nonresidential structure or nonresidential struc10It should be noted that this exemption does not apply to any credit which
is for the purpose of financing the construction of a multi-unit residence or
nonresidential structure or a major addition or major improvement to a multi
unit residence or nonresidential structure. However, see section 5(c).
S ec . 5
REGULATION X
13
tures or a major addition or major improvement to a nonresidential
structure, and the credit instrument provides, or an agreement with
respect to the credit requires, that within 32 days after completion
of such construction or upon a specified date when the Registrant
estimates in good faith the construction will be completed, which in
either case shall be not more than 24 months after the extension of
the credit, the terms of the credit shall conform thereafter with the
applicable maturity and amortization provisions set forth in Schedule
III of the Supplement to this regulation; but if at any time after the
date of the extension of such credit, a Registrant sells or transfers
title to the property with respect to which the credit is extended,'such
sale or transfer of title must conform to the provisions of this regu
lation and Schedule III of the Supplement thereto.
( d ) Medical Expenses, Etc.— The prohibitions of subsections (a)
and (6) of section 4 of this regulation shall not apply to any exten
sion of real estate construction credit as to which the Registrant ac
cepts in good faith a signed Statement of the Borrower certifying that
the proceeds thereof are to be used for b o n a f i d e medical, hospital,
dental, or funeral expenses, or to pay debts incurred for such expenses,
and that the proceeds of the extension are to be paid over in amounts
specified in such Statement to persons whose names, addresses and
occupations are stated therein.
(e) Casualties.— The prohibitions of subsections (a) and ( b ) of
section 4 of this regulation shall not apply to any extension of real
estate construction credit as to which the Registrant accepts in good
faith a signed Statement of the Borrower certifying that the proceeds
thereof are to be used solely for the replacement, reconstruction or
repair of a residence, multi-unit residence or nonresidential structure
destroyed or substantially damaged by flood, fire or other similar
casualty.
(/) Contracts to Sell.— None of the provisions of this regulation
shall apply to a contract to sell real property (1) which does not provide
for the payment of any part of the purchase price, or of any amount
to be subsequently applied to such price, except a deposit of earnest
money, before the' transfer of title to such property, (2) which is to
be performed by a transfer of title to such property within six months
after the date on which the contract was entered into, and (3) which
provides for the subsequent transfer of title to such property on terms
which conform to the provisions of this regulation and the Supplement
thereto in effect on the date the contract was entered into.
14
REGULATION X
S ex:. 5
( g ) Contemplated Construction.— Any builder or other person who
had made substantial commitments or undertakings before August 3,
1950, with a view to the building of new construction which is a resi
dence or a major addition or major improvement to a residence and
who asserts that his inability to obtain credit to finance such new
construction on the basis contemplated by him and by the Registrant
prior to August 3, 1950, would cause him substantial hardship, may
apply to the Federal Reserve Bank of the district in which the new
construction is contemplated for an exemption from this regulation
for such new construction, showing all the facts and submitting all
necessary supporting documents with respect to his commitments or
undertakings and why compliance with the regulation would cause
him substantial hardship. If such Federal Reserve Bank after con
sideration of the application and supporting documents determines
that substantial commitments were made prior to August 3, 1950, and
that substantial hardship would result from the application of this
regulation in such case, it may issue to such builder or other person
a certificate approving such application and thereupon any extension
of credit to such builder or other person by the Registrant named in
such certificate with respect to the new construction that may be speci
fied in such certificate shall be exempt from the prohibitions of sub
sections (a) and (b) of section 4 of this regulation. Applications under
this subsection must be sent to the Federal Reserve Bank prior to
March 15, 1951.
( h ) Labor and Material.— No person shall be required to register
pursuant to section 3 of this regulation because of the fact that he
performs labor or furnishes material for new construction on an open
account, unless he shall be otherwise engaged in the business of ex
tending real estate credit.
(i) Credits Secured by Life Insurance Policies.— None of the pro
visions of this regulation shall apply to an extension of real estate
construction credit which is fully secured by the loan value or cash
surrender value of a life insurance policy; and, notwithstanding any
other provisions of this regulation, a Registrant in determining the
amount of credit which he may extend under the provisions of section
4 of the regulation need not take into account any credit which is
secured in the manner specified in this subsection.
(;) Farm Property.— The prohibitions of subsections (a) and (b)
of section 4 of this regulation shall not apply to any extension of real
estate construction credit with respect to farm property unless the
REGULATION X
S ecs . 5 ,6
15
extension of credit is for the purpose of financing the construction of
a residence on farm property or a major addition or major improvement
to a residence on farm property.17
( k ) Exemption for Certain New Construction.— The prohibitions
of subsections (a) and (6) of section 4 of this regulation shall not
apply to any real estate construction credit extended prior to May 1,
1951, with respect to new construction (1) begun prior to October 12,
1950, if such new construction is a residence or a major addition or
major improvement to a residence, (2) begun prior to January 12, 1951,
if such new construction is a multi-unit residence or a major addition
or major improvement to a multi-unit residence,18 or (3) begun prior
to February 15, 1951, if such new construction is a nonresidential
structure or a major addition or major improvement to a nonresiden
tial structure.
( l ) Materials, Articles and Services Used in New Construction.—
None of the provisions of this regulation shall apply to an extension
of credit which is for the purpose of purchasing, or is in connection
with a sale of, materials, articles and services for new construction if
the credit is extended on terms which provide for a minimum down
payment of 10 per cent, or a maximum loan value of 90 per cent, and
for repayment within 30 months by (1) substantially equal monthly or
weekly payments covering principal and interest or (2) substantially
equal monthly or weekly payments of principal.19
SECTION
6.
M ISC E L L A N E O U S PROVISIONS
(a) Evasions.— No extension of real estate construction credit com
plies with the requirements of this regulation if at the time it is made
there is any agreement, arrangement, or understanding, of which the
Registrant knows or has reason to know, by which credit is or is to be
extended in violation of this regulation, even though such extension
of credit is or is to be made indirectly, or which would otherwise evade
or circumvent, or conceal any evasion or circumvention of, any pro
vision of this regulation or the Supplement thereto. No Registrant
17It is to be noted that the term “farm property” as defined in section 2(o)
does not include multi-unit residential property or nonresidential property;
accordingly, the location of multi-unit residential property or nonresidential
property does not affect the question whether extensions of credit with respect
to such property are subject to the regulation.
18For applicaion to three- and four-unit residences, see section 6 ( j ) .
19It should be noted that in certain circumstances more restrictive terms would
be required by Regulation W.
16
REGULATION X
S ec . 6
extending credit subject to this regulation shall divide such credit into
two or more parts, or enter into any agreement or understanding with
any other person as a result of which two or more credits are extended,
when the purpose or effect of such action is to circumvent or avoid the
amortization or maturity provisions of this regulation or the Supple
ment thereto.
(6) Outstanding Contracts and Obligations.— The prohibitions of
subsections (a) and (6) of section 4 of this regulation shall not apply
to or affect (i) any credit with respect to residential property or a
major addition or major improvement to a residence if extended prior
to October 12, 1950, or pursuant to any firm commitment to extend
credit made prior to such date, (ii) any credit with respect to multi-unit
residential property or a major addition or major improvement to a
multi-unit residence if extended prior to January 12, 1951, or pursuant
to any firm commitment to extend credit made prior to such date, or
(iii) any credit with respect to nonresidential property or a major
addition or major improvement to a nonresidential structure if ex
tended prior to February 15, 1951, or pursuant to any firm commit
ment to extend credit made prior to such date, if such firm commitment
complies with Clause (1) of the next succeeding sentence. For this
purpose, a firm commitment means either (1) a written agreement
under which the Registrant is required without option or discretion
on his part to extend credit upon demand by the borrower or upon
compliance by the borrower with one or more conditions referred to
in such agreement; or (2) any other agreement to extend credit with
respect to residential property, a residence, or a major addition or
major improvement to a residence which has been entered into in good
faith by the parties and in reliance upon which the prospective borrower
or builder has taken specific action prior to October 12, 1950, if the
Registrant prior to January 1, 1951, shall have sent to the Federal
Reserve Bank of the district in which he does business a letter or other
statement reciting the facts with respect to such agreement and the
specific action taken by the prospective borrower or builder prior to
October 12, 1950; or (3) any other agreement to extend credit with
respect to multi-unit residential property or a major addition or m ajor
improvement to a multi-unit residence which has been entered into in
good faith by the parties and in reliance upon which the prospective
borrower or builder has taken specific action prior to January 12, 1951,
if the Registrant prior to March 15, 1951, shall have sent to the Federal
Reserve Bank of the district in which he does business a letter or other
statement reciting the facts with respect to such agreement and the
S ec . 6
REGULATION X
17
specific action taken by the prospective borrower or builder prior to
January 12, 1951.20
(c) Real Property Outside the United States.— None of the pro
hibitions of this regulation shall apply to any extension of real estate
construction credit with respect to real property in Alaska, the Panama
Canal Zone, or any territory or possession outside the continental
United States.
( d ) Preservation of Records; Inspections; Administrative Re
ports.— For the purpose of determining whether or not there has been
compliance with the provisions of this regulation, every person ex
tending real estate credit with respect to residences, residential prop
erty, multi-unit residential property or nonresidential property shall
preserve for the period hereinafter specified such accounts, correspond
ence, memoranda, papers, books, and other records, or photostats or
other copies thereof, as are relevant to establishing whether such
person is engaged in the business of extending such real estate credit;
whether each credit extended is or is not real estate construction credit
with respect to a farm residence, residential property, multi-unit resi
dential property, nonresidential property, or a major addition or major
improvement to a residence, multi-unit residence, or nonresidential
structure; and whether each extension of real estate construction credit
conformed with the provisions of this regulation and the Supplement
thereto. Every such person shall preserve such records for three years
after the extension of such credit, or until the repayment of the credit,
whichever period is shorter, provided, however, that if such person
sells or transfers an obligation evidencing a credit (or releases collateral
held as security for such credit) and delivers his records relevant to
such credit to the purchaser or transferee, such person need not there
after maintain such records with respect to the credit but shall keep
a record of the identity of the purchaser or transferee and the date
of such sale or transfer (or such release). Every such person shall
permit the Board or a Federal Reserve Bank, by its duly authorized
representative, to inspect such records and business operations as the
Board or a Federal Reserve Bank may deem necessary or appropriate;
and when ordered to do so, shall furnish, under oath or otherwise, such
reports, information, or records relevant to extensions of credit as the
Board or a Federal Reserve Bank may deem necessary or appropriate
for the enforcement and administration of this regulation.21
20For application to three- and four-unit residences, see section 6(;).
21The reporting and record-keeping requirements of this regulation have been
approved by the Bureau of the Budget in accordance with the Federal Reports
Act of 1942.
18
REGULATION X
S ec . 6
(e) Default and Foreclosure; Serviceman’ s Preinduction Debt.—
Nothing in this regulation shall be construed to prevent any Registrant
from taking such action as he shall deem necessary in good faith (1)
with respect to any extension of credit to any member or former
member of the armed forces of the United States which was made to
him prior to his induction into such service and assignment to active
duty, or (2) for the Registrant’s own protection in connection with any
credit which is in default and is the subject of a b o n a fi d e collection
effort by the Registrant. The prohibitions of subsections (a) and ( b )
of section 4 of this regulation shall not apply to an extension of credit
by a Registrant in connection with a sale of property acquired by him
through foreclosure proceedings if such credit does not exceed the
unpaid principal amount of the foreclosed credit, the costs of acqui
sition through foreclosure, and the costs incurred in the rehabilitation
and repair of the property prior to the sale.
(/) Veterans Programs under State Law.— Nothing in this regu
lation shall be construed as prohibiting a State (as distinguished from
any other person affected by this regulation) from according rights
and preferences to eligible veterans by extending, guaranteeing or
insuring, in whole or in part, real estate construction credit pursuant
to State legislation similar in purpose or effect to Title III of the Serv
icemen’s Readjustment Act of 1944, as amended, provided that the
terms of the credit are no more liberal than are currently permitted
in the case of comparable loans insured or guaranteed under that Act.
( g ) State Housing Programs.— Nothing in this regulation shall
prohibit extensions of credit to public corporations created pursuant
to a public housing program of a State or municipality where such
credit is extended, insured, or guaranteed by the State or municipality
or the State or municipality has made commitments to furnish funds
to assure repayment.
( h ) Extension of Credit for Mixed Purposes.—In the case of an
extension of credit which is partly subject to one provision of this
regulation and partly subject to another provision, whether by reason
of the types of property involved, or otherwise, the amount and terms
of such credit shall be such as would result if the credit were divided
into two or more parts and each part were treated as if it stood alone.
In the case of an extension of credit which is partly subject to this
regulation and partly not subject to (or exempt from) the regulation,
the amount and terms of the extension of credit will comply with this
regulation if they satisfy the requirements of this regulation applicable
to the subject portion.
S ec . 6
REGULATION X
19
( i ) Calculation of Maximum Maturity.-—In calculating the max
imum maturity of credits which are subject to maximum maturity
provisions in the Supplement to this regulation, a Registrant may use,
at his option, as “ the date such credit is extended,” any date not more
than 32 days subsequent to the actual date such credit is extended.
(j ) Three- and Four-Unit Residences.— Notwithstanding any other
provisions of this regulation, the provisions of sections'4(a) (6), 5 (7c),
and 6(b) of this regulation which are applicable to multi-unit resi
dences shall be applicable to residences containing three or four family
units.
( k ) Right of Registrant to Impose Stricter Requirements.— Any
Registrant, if he desires, may refuse to extend credit, extend less credit
than the amount permitted by this regulation, or require that repay
ment be made within a shorter period or in larger instalments than
prescribed in the Supplement to this regulation.
( l ) Reliance upon Statement of the Borrower.— The facts set
forth in any signed Statement of the Borrower which a Registrant
accepts and relies upon in good faith shall be deemed to be correct for
the purposes of the Registrant.
(m) False Statements.— The making or submission by any person
of any false, fictitious or fraudulent statement or representation pur
suant to, or which is intended to conform to, or show compliance with,
any requirement or provision of this regulation, shall be a violation
of this regulation.
(n) Statutory Penalties.— The Act provides that “ Any person who
willfully violates any provision of section * * * 602 (relating to real
estate construction credit) or any regulation or order issued there
under, upon conviction thereof, shall be fined not more than $5,000
or imprisoned not more than one year, or both.”
(o) Enforceability of Contracts.— Nothing in this regulation shall
affect the enforceability of any contract.
SUPPLEMENT TO REGULATION X
As amended effective February 15, 1951
SCH EDULE I. O N E - TO F O U R -U N IT R ESIDEN TIAL PROPERTY AN D
FAR M
RESIDENCES
Maximum Loan Value.— For the purposes of Regulation X , maxi
mum loan values for all residential property, farm residences, and
major additions and major improvements to residences shall be deter
mined as follows: (1) Determine the "value” of the residential prop
erty, farm residence, or major addition or major improvement to a
residence, as the case may be, in accordance with section 2 ( i ) of the
regulation; (2) divide this "value” by the number of family units in
order to determine the “ value per family unit” ; (3) determine the
“ maximum loan value per family unit” from the table below; (4)
multiply the "maximum loan value per family unit” by the number
of family units in order to determine the maximum loan value of the
residential property, farm residence, or major addition or major
improvement, as the case may be. Where a major addition or major
improvement will change the number of family units, the "value per
family unit” shall be computed on the basis of the number of family
units which the residence will contain after the addition or improve
ment has been completed. In the case of credit extended with respect
to residential property or farm residences involving more than one
structure, the maximum loan value may be applied separately with
respect to each such structure or with respect to the entire property
or all such residences, at the election of the Registrant.
The "maximum loan value per
family unit” is
If the "value per family unit” is
90% of "value per family unit”
$4,500 plus 65% of excess of
“ value per family unit” over
$5,000
$7,100 plus 60% of excess of
"value per family unit” over
$9,000
$10,700 plus 20% of excess of
“ value per family unit” over
$15,000
$11,700 plus 10% of excess of
"value per family unit” over
Not more than $5,000
More than $5,000 but not more
than $9,000
More than $9,000 but not more
than $15,000
More than $15,000 but not more
than $20,000
More than $20,000 but not more
than $24,250
$ 20,000
50% of "value per family unit”
Over $24,250
20
REGULATION X
21
Maturity.— For the purposes of Regulation X , the following maturity
requirements are prescribed for credit with respect to residential prop
erty, farm residences, and major additions and major improvements to
residences: No such credit subject to the regulation shall have a
maturity of more than 20 years from the date such credit is extended
except that a credit extended with respect to property having a value
(determined as provided in section 2(f) of the regulation) of $7,000
or less may have a maturity of not more than 25 years if it is to be
fully repaid at or before the date of maturity through amortization
on the basis prescribed in clause (2) of the following paragraph
relating to amortization:
Amortization.— For the purposes of Regulation X , the following
amortization requirements are prescribed for credit with respect
to residential property, farm residences, and major additions and
major improvements to residences: With respect to every such
credit subject to the regulation, amortization payments shall be
required which either (1) will annually reduce the original principal
amount of such credit by not less than 5 per cent until the outstanding
balance of such credit has been reduced to an amount equal to or
less than 50 per cent of the value of the property with respect to
which such credit was extended or (2) will fully liquidate the original
principal amount of such credit not later than the date of the maturity
of the credit through substantially equal monthly, quarterly, semi
annual, or annual payments covering principal and interest or through
substantially equal monthly, quarterly, semiannual, or annual pay
ments of principal. The value referred to in the preceding sentence
shall be determined as of the date the credit was extended in the
manner provided in section 2(f) of the regulation. If the amount of
the credit when extended is not more than 50 per cent of such value,
such credit shall not be subject to the amortization provisions of this
paragraph.
SCH EDULE II. M U L T I -U N I T R ESID EN TIAL PROPERTY
Maximum Loan Value.— For the purposes of Regulation X , maxi
mum loan values for all multi-unit residential property and major
additions and major improvements to multi-unit residences shall be
determined as follows: (1) determine the “ value” of the multi-unit
residential property, or major addition or major improvement to a
multi-unit residence, as the case may be, in accordance with section
2(f) of the regulation; (2) divide this “ value” by the number of
family units in order to determine the “ value per family unit” ; (3)
22
REGULATION X
determine the “ maximum loan value per family unit” from the table
below; (4) multiply the “ maximum loan value per family unit” by
the number of family units in order to determine the maximum loan
value of the multi-unit residential property, or the major addition or
major improvement, as the case may be. Where a major addition or
major improvement will change the number of family units, the “ value
per family unit” shall be computed on the basis of the number of
family units which the multi-unit residence will contain after the
addition or improvement has been completed. In the case of credit
extended with respect to multi-unit residential property involving
more than one such multi-unit residence, the maximum loan value shall
be applied separately with respect to each such multi-unit residence or
with respect to the entire property, at the election of the Registrant.
If the “ value per family unit” is
The “ maximum loan value per
family unit” is
Not more than $7,000
83% of “ value per family unit”
More than $7,000 but not more
than $15,000
$5,810 plus 53% of excess of
“ value per family unit” over
$7,000
More than $15,000 but not more
than $23,500
$10,050 plus 20% of excess of
“ value per family unit” over
$15,000
Over $23,500
50% of “ value per family unit”
SCH ED U LE III.
N O N R E SID E N T iA L PROPERTY
Maximum Loan Value.— For the purposes of Regulation X , the
maximum loan value of any nonresidential property or major addition
or major improvement to a nonresidential structure shall be 50 per
cent of the “ value” of the property, or the major addition or major
improvement, determined in accordance with section 2 ( i ) of this regu
lation. In the case of credit extended with respect to nonresidential
property involving more than one nonresidential structure, the maxi
mum loan value may be applied separately with respect to each such
structure, or with respect to the entire property, at the election of the
Registrant.
Maturity.— For the purposes of Regulation X , the following maturity
requirement is prescribed for credit with respect to nonresidential
property and major additions and major improvements to nonresiden-
REGULATION X
23
tial structures: No such credit subject to the regulation shall have a
maturity of more than 25 years from the date such credit is extended.
Amortization.— For the purposes of Regulation X , the following
amortization requirement is prescribed for credit with respect to nonresidential property and major additions and major improvements to
nonresidential structures: With respect to every such credit subject to
the regulation, amortization payments shall be required which will
fully liquidate the original principal amount of such credit not later
than the date of the maturity of the credit through substantially equal
monthly, quarterly, semiannual, or annual payments covering prin
cipal and interest or through substantially equal monthly, quarterly,
semiannual, or annual payments of principal.
REAL ESTATE CREDIT REGULATION
REGISTRATION STATEMENT UNDER REGULATION X
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
For instructions refer to reverse of this form
State aiso trade name if different from legai name
Legal name of Registrant (print or type)
Street address
City
Zone No.
County
State
I. Indicate by check mark whether Registrant is in business as (1) individual -------- , (2) partnership -------- , (3) corpora
tion _____ , or (4) other form (specify) --------------------------------------------------------------------------------------------------------------------------II. Principal business of Registrant.
□
□
(Check only one.)
(1) Commercial bank or trust com
pany
(2) Trust department of commer
cial bank
□
(3) Savings bank
□
(4) Savings and loan association
□
(5) Insurance company
□
(6) Sales finance company
□
(7) State-licensed small loan com
□
(8) Mortgage company
□
(9) Mortgage broker or agent
□
□
(10) Real estate broker or agent
□
(11) Builder or developer
(12) Dealer or contractor in heat
ing, plumbing, air condition
ing equipment, etc., or reno
vation and repairs
□
□
pany
□
(13) School, university, charitable
foundation, church, or simi
lar educational, charitable,
or nonprofit organization
□
(14)
o
bo
£
£
rQ
cS
□
(15) Individual trustee or executor
Eh
□
(16)
IS
O
c3
<D
&
£
III. Outstanding amount of loans secured by real estate, held by Registrant for own account as of May 31, 1951.
mate any figures which are not readily available and mark them “ est.” )
A. On residences, residential properties, or multi-unit residential properties:
(1) Insured by the Federal Housing Administration
(Please esti
Amount outstanding
$________________
n
(2) Guaranteed or insured by the Veterans Administration (including the VA guaranteed
second mortgage part of “ combination” loans) .....................................................................
.....................................................................
$________________
12
(3) Not insured or guaranteed......................... ......................................................................................
$________________
13
(4) Total, residential properties......................... ■....................................................................................
$________________
14
(1) Farm................. ....................................................................................................................................
$-------------------------
25
(2) O th e r....................................................................................................................................................
$-------------------------
26
(3) Total, all other properties...................................................................................................................
$........ ...... ..... .........
27
$-------------------------
38
$ -------
49
B. On all other properties:
C. Total, loans secured by real estate
(Sum of A (4) and B(3) above).............................................................................................................
IV. Outstanding amount of loans secured by real estate which were being serviced by Registrant for
others as of May 31, 1951.....................................................................................................................................
I certify under the penalties of Regulation X of the Board of Governors of the Federal Reserve System that to the best of
toy knowledge and belief the foregoing facts are correct (except as to any items marked “ est.” which are estimated in good faith).
Date
Signature of Registrant or of officer
authorized to sign for Registrant
Title
Form FR 269
Form Approved
Budget Bureau No. 55-R-184
REAL ESTATE CREDIT REGULATION
REGISTRATION STATEMENT UNDER REGULATION X
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
INSTRUCTIONS
All those subject to Regulation X, the Real Estate Credit Regulation of the Board of Governors of the Federal Reserve
System, are to register in accordance with Section 3 ( b) of the regulation.
How and where to register—Those subject to Regulation X should register by filling out this form and returning it to the
nearest Federal Reserve Bank or Federal Reserve branch.
When to register— Those subject to Regulation X as of May 31, 1951, should return this form properly filled out not later
than June 30, 1951. Those who become subject to the regulation after May 31, 1951, should return this form within 30 days after
they become subject.
Who is to register— A Registrant is defined in the regulation as a person who either (1) extends or has extended real estate
credit more than three different times during the current calendar year or during the preceding calendar year, or (2) extends or
has extended real estate credit in an amount or amounts aggregating more than $50,000 during the current calendar year or the
preceding calendar year. In other words, you should register if you extended real estate credit four times or more in either 1950
or so far in 1951, or if you extended more than $50,000 of such credit in either of these years. Extension of real estate credit
includes not only credit secured by real estate, but also credit for the purpose of purchasing, financing, or carrying real estate.
The number and amount of credit extensions includes transactions as a fiduciary or as agent, as well as for your own account.
Examples of those who should register are given below. If after studying these instructions and examples you are still
uncertain whether or not to register, you may consult the nearest Federal Reserve Bank or branch.
(a) Organizations and individuals lending on mortgages, deeds of trust, land contracts, or the like, whether first
or junior liens, or purchasing or discounting such instruments.
(b) Builders or other sellers of real estate selling subject to, or with assumption of, previously existing mortgages
on which they were the obligors.
(c) Mortgage or real estate brokers, or others who arrange for extensions of credit in connection with .real estate
as agents for the lender.
(d) ’ Loan and finance companies, commercial banks and trust companies, credit unions, and similar organizations
or individuals lending to others for the purchasing, carrying, or financing of real estate, regardless of the nature of the
security.
Subsidiaries, affiliates, and branches— Subsidiaries and affiliates which are subject to the regulation should register whether
or not the parent organization registers. Organizations or other persons maintaining branch offices should register for the
head office and all branch offices, show combined figures in Items III and IV for all offices, and attach a list of branch offices
unless Registrant is a bank.
Fiduciaries— Fiduciaries, including trustees, trust companies, and trust departments of commercial banks, should file sepa
rately from any organizations or other persons with which they are affiliated. Fiduciaries should report in Item III as “ loans
held for own account” loans which they hold or service in any fiduciary capacity, regardless of the degree of discretion or con
trol involved, including loans which they hold or service as agents for others.
FILL OUT THE STATEMENT ON THE REVERSE OF THIS FORM AND RETURN TO THE NEAREST FEDERAL
RESERVE BANK OR BRANCH. YOU MUST RETURN THIS FORM BY JUNE 30, 1951, OR WITHIN 30 DAYS AFTER V O L
BECOME SUBJECT TO THE REGULATION, WHICHEVER IS LATER.
@FedFRASER